Lee Chang-yong, the Governor of the Bank of Korea, expressed concerns that privately-led won stablecoins could accelerate capital outflow and emphasized the need for regulation.
On the 1st (local time), Governor Lee attended a policy discussion at the European Central Bank (ECB) forum held in Sintra, Portugal, stating, 'The exchange between won stablecoins and dollar stablecoins will accelerate,' and added, 'Permitting the issuance of won stablecoins could undermine the management regulations on capital inflows and outflows.'
He noted, 'In Korea, stablecoins are a very hot issue,' mentioning that 'as the Genius Act has passed in the United States, many fintech companies are asking the government to allow them to issue stablecoins,' and added, 'However, the issuance of stablecoins by non-bank financial institutions requires discussion with governmental agencies beyond the Bank's authority.'
Governor Lee also pointed out, 'Some argue that blockchain technology can identify irregular transactions and comply with know your customer (KYC) requirements, and detect suspicious transactions, but I cannot be certain about its practical feasibility,' while also highlighting the issue of narrow banking (banks that perform limited functions without lending).
The Bank of Korea is currently conducting a deposits token project in collaboration with commercial banks. However, it views the issuance of stablecoins on public blockchains as a fundamentally different issue.
In an interview with CNBC that day, he said, 'If private funds pour in due to the issuance of won stablecoins, it may become very difficult to control the currency supply.' He dismissed industry claims that stablecoins should be issued to maintain currency sovereignty against dollar stablecoins.
He said, 'Honestly, I would say the opposite,' stating, 'The very existence of won stablecoins could make the transition to dollar stablecoins easier, which could ultimately lead to increased use of dollar stablecoins.'
However, mentioning the demands of fintech and others, he said, 'In a situation where new demands have emerged, we need to recalibrate our plans.'